Posts Tagged ‘innovate’

“Loved your last blog post, Jim – but how do companies like mine do those things?”

So here are some ways any business owner can implement the 6 tips in his/her company.

1. Able to spot trends earlier than most of their competitors.

Stay close to key customers and suppliers – ask what they see in the future, how you can help them. Don’t leave it to sales people, meet with the owner/CEO twice a year. Pay special attention to customers who are ‘early adopters’ of new technologies and processes.

Get involved in industry bodies, serve on committees, listen for trends in what suppliers and competitors are saying.

Make your own internal data easy to access and analyze.

2. Very willing to try new things (innovate, adapt).

Have a pipeline full of growth initiatives at different stages of development.

Understand that people who are good at making things efficient aren’t good at innovation. They’re 2 different skill sets, have a mix of both.

Do limited tests of new products and systems and quickly roll out the ones that work.

3. Always trying to be better – than themselves.

Adapt your culture so that employees are comfortable challenging the status quo. Continuous improvement and innovation become by-products of that.

Never sacrifice effectiveness to short-term cost reduction programs.

4. Following a strategy or plan.

Have a clear picture of what your Company will look like in 3 years.

Set priorities and allocate investment and resources accordingly.

Anticipate change. Update your current situation twice a year and adjust where required. (Staying close to the market also allows you to surface risks and respond to them early.)

January is the month for New Year’s resolutions, freezing cold and, for many, a new fiscal year.

Everyone wants to ‘do better’ in 2015 than in 2014 and, for business owners, ‘doing better’ is shorthand for growing.

I don’t know how often, in the last couple of weeks, I’ve been asked something like “What are your top 6 tips for growing successfully”.

The answer depends on a number of things.

That said here are some of the things that the companies I’ve seen grow successfully have in common.

Those companies are:

1. Very willing to try new things (innovate, adapt). However they don’t bet the farm. They do limited scale tests of new products and ways of doing things first. Ones that work are rolled out quickly; ones that don’t are killed – just as quickly.

2. Always trying to be better – than themselves. They are continually looking for ways to, for example, improve their own quality, do things more quickly and become more efficient. They don’t compare themselves to others, they just want to the best they can be.

3. Following a strategy or plan. They know where they want to be in 3 – 5 years but don’t expect to get there by following a straight line. They try to keep growing steadily in good times and in bad.

4. Skilled at turning their plan into results. Knowing what success will look like makes it easier for them to set priorities and allocate the resources and funds to achieve them. They link every individual and every department’s work to the company’s goals and hold themselves accountable.

5. Able to spot trends earlier than most of their competitors. They stay close to their customers and suppliers, monitor their competitors and watch for developments in technology.

6. Working from a solid foundation. All of their core business processes – sales, marketing, operations, finance and HR – are tried, tested and automated wherever possible. They find, hire and retain smart people who are a good “fit” with their culture and values. They are fiscally cautious, never over extend themselves and can fund their growth.

Here’s the rub. All 6 are much easier to talk about than do.

But if you start on them now you can make some progress this year. And if you need some help just give us a call…….

I promised then that I’d talk about how to make a company profitable and strong. So here we go.

1. How do you achieve consistent profitability? Here are 6 things every business owner can do to increase the odds that her/his company will produce consistent, industry beating profits:
a. Develop a strong product line – not only having width and depth in current products but also always having new products under development.
b. Build a great reputation – and recognizable identity or brand – in your target market(s) by delivering quality products and services, on time, that meet your customers’ needs.
c. Be in more than one market (which ideally do well in different phases of the economic cycle).
d. Have a broad customer base built on strong companies or affluent consumers.
e. Generate a stream of recurring revenue rather than working solely on projects which have to be replaced when complete.
f. Innovate – and create some intellectual property, products or processes, which can be protected, creating a sustainable advantage or a barrier to lock out competitors.

2. How do you make a company strong? Here are 6 things an owner can do to survive the loss of key people and keep his/her company’s balance sheet ratios looking good:
a. Document all processes. Especially the sales process which can be mapped, then managed, using a CRM system.
b. Involve all of the key people in a formal, annual business planning (and budgeting) process, which is completed 2 months before the start of a fiscal year and which includes formal, quarterly reviews.
c. Maintain strong internal financial controls, including cash flow forecasting, and insist on timely, monthly reporting.
d. If the management team doesn’t know and understand the drivers of the key balance sheet ratios have your accountant run a training program for them.
e. Always put leases and contracts – for everything and everyone – in writing.
f. Make Human Resources management a key part of your strategy and culture by e.g. driving accountability and responsibility through job descriptions; making decision making independent of the owner; identifying talent and training people for growth.

A company which is profitable and strong can survive the prolonged absence of the current owner as a result of injury or illness because it will continue to:
• Execute its proven strategy.
• Be innovative, building barriers against competitors.
• Operate day-to-day without missing a beat.
• Produce revenues and profits at, or above, previous levels.
• Keep and attract good people.
• Attract financing should it be required.
• Survive any unexpected crises in the industry or economy.

The ability to do that also makes this type of company very attractive to a potential buyer – because the risk of the company failing in the short term is reduced significantly. And that means the valuation of the company – which determines the selling price – will be at the high end of the scale.

So by doing the 12 things I mentioned (and, in all fairness, some others like them) a business owner wins in 3 ways.

She or he makes great money while they run the company. They build security for themselves and their families in the event they are injured, fall ill or even die. And they maximize the return on the long hours, missed vacations and risks they’ve taken by getting a great price for the company if it’s sold.